Goldman Sachs Considers IPO for Alternative Investment Division 'PeterSil Partners'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Byunghee Park] Goldman Sachs is reportedly considering the IPO of Peterseal Partners, its alternative investment management division established in 2007.

According to major foreign media on the 6th (local time), Peterseal announced that it is reviewing a listing on the London Stock Exchange (LSE). Insiders say the IPO could be completed within a month.

Peterseal is the first division Goldman Sachs established related to private equity and alternative investment management. Founded in 2007, Goldman Sachs subsequently established additional private equity and alternative investment management divisions.

With the global private equity and alternative investment markets experiencing a boom this year, Peterseal’s valuation is expected to exceed $5 billion. Peterseal holds stakes in 19 alternative investment managers. The assets under management by these 19 firms total $187 billion. If Peterseal goes public, it is expected to become the largest alternative investment manager listed on the LSE.

Goldman Sachs plans to sell a 25% stake in Peterseal through the IPO. It also intends to raise $750 million by issuing new shares. The funds raised are expected to be used by Peterseal for additional investments in private equity or alternative investment markets. If the IPO proceeds as planned, Peterseal is also expected to be included in the FTSE index.

Since David Solomon became CEO of Goldman Sachs, the firm has been expanding its asset management business. CEO Solomon is reducing the proportion of volatile equity and bond trading businesses and growing the asset management business, which generates stable fee income. Last month, Goldman Sachs acquired NN Investment Partners, the asset management subsidiary of Dutch insurer NN Group, for 1.6 billion euros. Solomon took office as Goldman Sachs CEO in October 2018 and has also served as chairman since January 2019.

With the ongoing low interest rate environment, the alternative investment market is experiencing a boom. Investors dissatisfied with low interest rates are actively allocating funds to alternative investments seeking higher returns. According to financial data provider Preqin, the asset size of the alternative investment market is expected to grow by 9.8% this year. The asset size, which was $10.7 trillion last year, is projected to increase to $17.2 trillion by 2025.

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